Writ Petition No. 308 of 2016. Case: Border Trade & Chamber of Commerce Vs Union of India and Ors.. Meghalaya High Court

Case NumberWrit Petition No. 308 of 2016
CounselFor Appellant: P. Sikdar, Adv. and For Respondents: N. Mozika, Adv.
JudgesDinesh Maheshwari, C.J. and Ved Prakash Vaish, J.
IssueCustoms Act, 1962 - Sections 25, 25(1), 25(4); Customs Tariff Act 1975 - Section 3; Income Tax Act, 1961 - Sections 271, 271(1)(c), 271(1)(c)(iii)
Judgement DateFebruary 23, 2017
CourtMeghalaya High Court


Dinesh Maheshwari, C.J.

1. The petitioner, said to be an Association of the persons engaged in export and import trade with Myanmar through Moreh Land Custom Station (Manipur), had filed this writ petition on 13.10.2016 seeking to question the directions issued by the Commissioner of Custom (Preventive), North Eastern Region, Shillong (respondent No. 2), as contained in the letter dated 06.10.2016 (Annexure-6), whereby the members of the petitioner-Association were directed to furnish Bank Guarantee to the tune of 40% of the duty allegedly leviable in relation to the import of Areca Nuts/Betel Nuts.

2. In view of the subsequent event where the respondents have issued an amendment notification on 27.01.2017 in relation to the goods in question and in view of the contentions urged, the only question now calling for determination in the present matter is as to whether the amendment notification dated 27.01.2017 is prospective in operation or could have any retrospective operation? Hence, in the given set of facts and circumstances, only a brief reference to the background aspects would suffice.

3. It has been the contention on behalf of the petitioner that the import of Areca Nuts (Betel Nuts), falling under Customs Harmonized System Code (HS Code) No. 08028010 and 08028020 of Customs Tariff Act, 1975, from Myanmar attracted Nil rate of Basic Customs Duty ('BCD') under Notification No. 96/2008-Customs dated 13.08.2008 (as amended), without any condition; and accordingly, import was allowed by the respondents until first week of the month of September, 2016 but thereafter, the respondent No. 2 directed without any authority of law, that Bank Guarantee to the tune of 40% of the normal duty for import of the said goods be furnished. The relevant contents of the impugned communication dated 06.10.2016 (Annexure-6) had been as under:-

"At the outset, it may be pointed out that the import of Areca Nuts/Betel Nuts has not been suspended at Moreh LCS. Areca Nuts/Betel Nuts were cleared at Nil BCD. However on re-examination of the issue by the Central Board of Excise & Customs it was pointed out that Betel Nuts attract 40% BCD in terms of entry at Sl. No. 14 of Notification No. 96/2008-Cus dated 13.08.08 (as amended). Accordingly instructions were issued to levy/collect 40% BCD on Areca Nut/Betel Nut. However as the matter is pending with the Board for a final decision, revised instructions have been issued to the field formations to allow clearance of Areca Nuts/Betel Nuts provisionally at Nil Basic Customs Duty along with submission of Bank Guarantee for the differential duty i.e. 40% {rate of duty applicable in terms of Appendix I of Notification No. 96/2008-Cus: dated 13.08.08 (as amended)}."

4. The petitioner has pointed out that the respondent No. 2 had earlier issued the clarifications/directions dated 20.01.2016, to the effect that the import of Areca Nuts (Betel Nuts) under HS Code No. 08028010 and 08028020 attracted Nil rate of BCD under the said Notification No. 96/2008-Customs dated 13.08.2008 (as amended) without imposing any condition. According to the petitioner, there was no change of facts or law; and all of a sudden, a different interpretation of the said exemption Notification with regard to Areca Nuts (Betel Nuts) under HS Code 08028010 and 08028020 was entirely illegal, unjustified and unwarranted.

5. Initially, the respondents had submitted in their counter affidavit that under the said Notification No. 96/2008 - Customs: dated 13.08.2008 (as amended), the goods falling under the First Schedule to the Customs Tariff Act, 1975, other than those specified in...

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